Development approval about to lapse? How to keep it alive, and fund the start

A development approval is usually the most valuable document attached to a site, and most of them carry an expiry date. If the work hasn’t started by that date, the approval generally lapses. In NSW that’s five years after the consent operates unless real works have physically commenced; in Victoria you can seek an extension within set windows; in Queensland you must apply before the currency period ends. Starting properly costs money before any construction loan is in place, and that’s the gap property equity often fills.

This guide is for owners and small developers who’ve just looked at the paperwork and realised the clock is closer to midnight than they thought. It covers how to find the real date, what “starting” means in the three biggest states, what extensions are available, and how the early costs are funded.

Why does a lapsing approval matter so much?

Because the approval is a big part of what the site is worth. A block with a current approval for townhouses, a warehouse or a subdivision is a ready-to-go project. The same block without it is back to a planning risk, a new application, new fees, current planning controls that may have tightened, and months or years of holding costs.

A lapse also hits your funding. Any loan sized around the approved project, any presale campaign and any exit built on “sell the site with DA” relies on that approval being alive. If you already carry debt on the site, a lapse can turn a comfortable exit into a difficult one. Our page on exit strategy explains why lenders look so closely at this.

Step one: find your actual lapse date

Don’t work from memory or a rule of thumb. The date is set by the approval document and the legislation together.

• Read the consent, permit or decision notice. Conditions often state the period, or a shorter one than the default.
• Find the operative date. In NSW, the five years runs from the date the consent operates, which isn’t always the date on the letter, for example where an appeal or deferred commencement condition applies.
• Check any modifications. An amended approval may or may not change the timeframe; ask your planner how yours is treated.
• Put the date in writing. Get your planner or solicitor to confirm it in an email, then count backwards to plan the works.

If you’re buying a site rather than holding one, this check belongs in your pre-purchase work. Our development site due diligence guide covers it alongside zoning, easements and services.

What counts as starting work in NSW?

Under section 4.53 of the Environmental Planning and Assessment Act 1979, a development consent generally lapses five years after it operates. It doesn’t lapse if building, engineering or construction work relating to the development has physically commenced on the land before that date.

The bar was raised for consents granted from 15 May 2020. The EP&A Regulation 2021 lists activities that don’t count as physical commencement on their own:

• bore holes for soil testing, or taking water or soil for testing;
• survey work, including placing pegs or equipment;
• acoustic testing;
• removing vegetation as an ancillary activity;
• marking the ground to show how the land will be developed.

Older consents are judged on the earlier, looser test, but relying on minor works is a risk either way.

Two more points matter. First, the works must be lawful. Clarence Valley Council’s guidance on lapsing consents says work done without a construction certificate isn’t treated as physical commencement. For a building, it describes commencement as appointing a principal certifier, getting a construction certificate and pouring the footings or slab after the first inspection passes. Second, the same council says the five-year period can’t be extended, and the temporary COVID extension has long expired. In NSW, starting on time is usually the only real option.

The council also notes you can ask it to confirm in writing that a consent has been activated, which is worth having before you sell or refinance.

How do extensions work in Victoria?

Victorian planning permits usually carry conditions setting dates to start and finish the development. If you can’t meet them, section 69 of the Planning and Environment Act 1987 lets the owner or occupier ask the council for an extension of time:

Your situation	When you can ask
Development hasn’t started	Before the permit expires, or within 6 months after it expires
Development lawfully started before expiry	Within 12 months after the permit expires
Outside those windows	Melton City Council says it can’t consider the request and there’s no VCAT review

Extensions aren’t automatic. Councils weigh things like how long the permit has already run and whether planning controls have changed. Fees vary by council. The safest course is to apply early and, where you can, to have lawfully started works before expiry so the longer window is available.

How do extensions work in Queensland?

Under the Planning Act 2016, an approval lapses at the end of its currency period unless a milestone is reached. For a material change of use, the first change of use must happen. For reconfiguring a lot, the plan must be given to the local government. For other development, it must be substantially started. A material change of use approval generally runs for six years unless the approval states a different period.

Section 86 lets you apply to the assessment manager to extend the currency period, but only before it lapses. The assessment manager can grant what you asked for, refuse it, or grant a different period. Don’t leave the application until the final weeks.

Other states and territories have their own rules. Check the approval itself and your state planning legislation, and ask a local planner.

What does it cost to start lawfully?

This is where many owners get caught. The approval is about to lapse, the construction lender won’t fund until the full build package is ready, and the early costs land on the owner. Typical items include:

• certifier appointment and construction certificate fees;
• engineering, structural and hydraulic design to construction-certificate standard;
• developer contributions or infrastructure charges payable before a certificate issues — see funding contributions and council fees;
• site establishment, fencing, earthworks and service connections;
• footings, a slab or other early works the consent requires.

None of these is extravagant on its own. Together they add up quickly, often at a time when the owner’s cash is tied up in the site. If the approval is close to lapsing, check what your existing property could fund before the deadline gets any closer.

How can property equity fund the first works?

A short-term private loan secured on property you already own can cover the cost of getting started and holding the site until construction finance is in place. Loans run from $20k to $5m against residential, commercial, industrial, rural or vacant land. Interest is capitalised for up to 6 months, so there are no repayments in that period, and terms are open with no penalty for early repayment. There’s no formal valuation required, and funding can happen in as little as 24 hours from a clean, complete scenario.

We don’t fund construction progress draws. The usual structure is our loan for the start-up and holding costs, then a construction lender for the build, with the private loan repaid from the construction facility, a sale or a refinance. Our pre-construction costs page sets out what that covers. If you’re holding the site longer than planned, land bank loans explain how holding costs are funded.

Illustrative example: nine weeks to commence

Illustrative: A builder-developer in Sydney’s north-west holds a site with consent for four townhouses, granted in late 2021. Reviewing the paperwork, the planner confirms the consent lapses in nine weeks and that survey work already done won’t count. The certifier needs updated engineering before issuing a construction certificate, and a contributions payment is due first. The construction lender won’t settle the build facility for at least four months.

The owner holds a completed duplex, debt-free, in the same company. A private first mortgage over the duplex funds the contributions, certifier and design fees, site establishment and the footings, with interest capitalised so nothing is payable for the first six months. Footings are poured after the first inspection, the certifier records it, and the owner asks council for written confirmation the consent is activated. When the construction facility settles, part of it repays the private loan. The exit was agreed upfront.

Mistakes that cost approvals

• Assuming survey pegs or a soil test is enough. For newer NSW consents, it isn’t.
• Starting before the paperwork is in place. Unlawful works don’t count, and may create a separate compliance problem.
• Counting from the wrong date. Check the operative date and any conditions that change the period.
• Applying for a Queensland extension too late. The application must be made before lapse.
• Leaving funding to the last fortnight. Certifiers and councils move at their own pace; the money should be ready before they are.

Keep the approval, and the value, on your side

An approval you spent years and real money winning shouldn’t disappear because the first works weren’t funded in time. If you own other property and need to get the project started before the date passes, this is exactly the kind of developer scenario we lend on.

Our loan check is roughly a minute of your time, and enquiring involves no credit check. We’re the lender, so nothing gets farmed out to a queue of funders and you won’t spend the afternoon fielding calls from people you’ve never heard of. Instead, one secured-lending specialist looks at your site, your security and your deadline, then picks up the phone. Give us accurate figures in the form — the lapse date, the property you’d offer as security, what’s owing on it and how you plan to repay — so we can give you an answer that holds up first time.

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